New FAR Rule About Companies with Felonies or Delinquent Taxes in Effect

COs prohibited from making awards to companies with felonies or delinquent taxes

The Federal Acquisition Regulation has been updated to “prohibit the Federal Government from entering into a contract with any corporation having a delinquent Federal tax liability or a felony conviction under any Federal law, unless the agency has considered suspension or debarment of the corporation and has made a determination that this further action is not necessary to protect the interests of the Government.”

This rule takes effect February 26, 2016.

Contractors responding to federal solicitations are now required to state in their offers to the government whether they are a corporation with: 1) a delinquent federal tax liability or 2) a felony conviction under federal law. When an offeror provides “an affirmative response” in connection with either of these representations, the contracting officer (CO) is required to request additional information from the offeror and to notify the “agency official responsible for initiating debarment or suspension action.”

The new rule further provides that the contracting officer “shall not make an award to the corporation unless an agency suspending or debarring official has considered suspension or debarment of the corporation and determined that this further action is not necessary to protect the interests of the Government.”

The implementing clause can be found at FAR 52.209-5 – Certification Regarding Responsibility Matters.